Friday, March 16, 2007

March Madness

March Madness is what you get when you learn that Pfizer will pay it's vice chairman Karen Katen $76.8 million to step aside when she leaves the company and you find it is considered chump change compared to the nearly $200 million that Pfizer's Chief Executive Henry "Hank" McKinnell got when he decided to step aside.

But this commentator to the above blog put this all in perspective:

What’s worse: Katen’s millions for running what was considered by many as the greatest Rx company in history OR paying drug reps $75,000+ a year to leave their house after 10am grab 10 quick signatures (never selling a thing!), spending $400 on lunch every day, then going home at 3pm. Get a clue! The whole industry is screwed up.

Let's do the math, shall we? Doctor bills $100 for 5 min visit, collects about $53 dollars from Medicare (if lucky). Of that, about say, $43 goes to pay overhead. Net profit: $10. Based on working 50 weeks a year at 40-hr work week, and assuming there are 12 five-minute periods per hour, the doctor's annual salary from those visits (assuming this is ALL he did all year), would be $240,000 per year.

Now lets work backward on $76.8 million for Ms. Katen. If this was given for a single year's work, we could take the same 2000 hours of work per year x 12 5-minute periods makes $3,200 take-home salary. To achieve this salary, she would have had to bill you $32,000 for the same 5 minutes to achieve her take (assuming the same take-home collection rate of 10% of the amount billed as in the example above).

And we're not even taking about the subsequent pension burden to Pfizer upon her departure.

Truly amazing! I may change to simvastatin sooner than later. I already choke each month when I pay for my Lipitor. Your anonymous commenter also failed to take the education that physicians have into account. I vote for the docs any day!

About Me

Westby G. Fisher, MD, FACC is a board certified internist, cardiologist, and cardiac electrophysiologist (doctor specializing in heart rhythm disorders) practicing at NorthShore University HealthSystem in Evanston, IL, USA and is a Clinical Associate Professor of Medicine at University of Chicago's Pritzker School of Medicine. He entered the blog-o-sphere in November, 2005.
DISCLAIMER: The opinions expressed in this blog are strictly the those of the author(s) and should not be construed as the opinion(s) or policy(ies) of NorthShore University HealthSystem, nor recommendations for your care or anyone else's. Please seek professional guidance instead.